Pensions Bill

Written evidence from Clive Walford (PB 01)

This submission is made by Clive Walford, a British Citizen, the Chairman of the e-mail group of British State Pensioners living in retirement in Indonesia and Viet Nam. (P-PiI) Pension-Parity in Indonesia.(uk) (and Asia/Pacific). This group works with the International Consortium of British Pensioners (ICBP) that represents frozen pensioners worldwide.

I lived and worked in the UK until moving to Indonesia in 2006 aged 68. Up until being made redundant at 59 I was never unemployed. I also worked as a retained fireman for 8 years. I was a qualified traffic engineer and paid full N.I contributions for 40+ years.

After redundancy, rather than be "unemployed" I took on part time employment as a sales person and also an office cleaner until retirement at 65.

I consider that in my working life I made substantial contribution to the UK financially and as a result of my work as both a traffic engineer and as a firefighter.

Index

1 ) Summary

2) Basic State Pension (BSP)

3) The frozen pension

4) Why doesn’t the DWP uprate all pensions to stop the discrimination then?

5) Equality or discrimination

6) Communication

1 ) Summary

(**)"The Work and Pensions Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Work and Pensions and its associated public bodies".

a) This submission only refers to that area of the Bill that relates to "Frozen Pensions or pensioners". It points out the discrimination against some State Pensioners, the misconception of how pensioners are frozen and the inconsistency of how the Government’s Policy of Equality and Fairness is followed.

b) The Government Paper, "House of Commons, Work and Pensions Committee, The Single-tier State Pension: Part 1 of the draft Pensions Bill", is used to prove the aim of this submission. (marked**).

c) (**) In their summary the committee said "it was not possible for parliamentary committees to conduct effective scrutiny so close to the deadline".

How could the committee ever have carried out a full examination of all aspects of the Bill fully in this case including the overall effects of the frozen pension policy?

d) (**) They also said "We consider it imperative that the Government now carries out a further Impact Assessment of the Single-tier Pension proposals, taking full account of the implications of the changed implementation.

e) A further assessment certainly should also include the financial impact on frozen pensioners (individuals). The longer term impact will be disastrous for many of those pensioners. (i.e. stuck on the same pension for 30 years?)

f) It should also consider the overall financial effects on the total UK budget as pensioners have a major effect on other public bodies such as the National Health Service and of course the treasury etc.

g) I suggest that the committee failed, (were unable), to fully consider all of the facts surrounding frozen pensions in examining the expenditure affecting the Bill in as much as the overall cost and savings to the Treasury, was not mentioned where frozen pensions are concerned. (rather than just the cost to DWP)

2) Basic State Pension (BSP)

a) The BSP is, as clearly stated in the House of Commons Library Standard Note SN/BT/2117 updated on 14 July 2010, "an entitlement to which people build entitlement on the basis of their National Insurance record. The current statutory requirement is that the basic State Pension (BSP) must be increased each April at least in line with prices". It is also quoted in Part 1 of the new Bill Para 2, also in the current Pension Act, that the BSP is the people’s entitlement based of their National Insurance record. The BSP is always therefore the current rate. It is not the rate for year - - - -,plus the following years increases. All pensioners are therefore entitled to the full current rate of the BSP.

b) There are no conditions at those points of reference saying subject to where you may live. In this Bill the frozen pension condition is tucked away in clause 20 which allows a Regulation to be made which will add the frozen pension condition. (discrimination)

c) The use of Regulations, particularly in this case is a "back door" to devalue the BSP for just some people. (i.e. Discriminate against) . As you know Regulations do not have to go through the full Parliamentary procedures as for a new Bill and therefore Many MPs will not be aware of some Regulations being made or of the impact of the contents of those Regulations.

d) (**)58. The Explanatory Notes to the draft Bill explain that most of the provisions "will be brought into force by means of commencement orders made by the Secretary of State, in the usual way". Is it right that the Secretary of State should be permitted to introduce discrimination without going through the full parliamentary procedures for such a far reaching decision which is against Government Policy?

e) (**) 63. The Minister confirmed that most of the draft Regulations would not be available until

much nearer the date of implementation which means that MPs will not have the opportunity to disagree with the Regulations that may be allowing the discrimination against some pensioners to be brought into effect.

f) On the subject of derived pensions the Minister stated that (**) "you are claiming on the basis of a UK National Insurance record. You can be anywhere in the world and claim on the basis of the National Insurance record of someone who has built one up in this country".

h) So we have 1) "derived pensioners", 2) UK living Pensioners, 3)pensioners living in some overseas countries, ALL getting their full pension based on their National Insurance record. We then have 565,000 other pensioners that do not get their full pension based on their National Insurance record. Bearing in mind all that has been said before in this submission how can this blatant discrimination be allowed to continue? Clause 20 must be removed from this Bill. Existing pensioners must receive the same consideration and Regulation 3 be amended so that all pensioners get the full uprated pension.

3) The frozen pension

a) Although everyone is entitled to the BSP based on their N.I. contributions, governments over many years have failed to give some existing pensioners the full BSP purely because of the country outside the UK they chose to live in. (i.e. The pension is frozen to that they received the day they moved to the country of their choice). The Minister has stated that this Bill will continue this practice for new pensioners. This is a clear cut case of discrimination.

b) If for example you consider the current number of pensioners There are approximately 12 million people receiving the BSP. 1.2 million of them live overseas. Of those 1.2 million 565,000 have their pension frozen from the day they move from the UK to some countries. The other 650,000 do not have their pensions frozen when they move to different countries and get the annual index linked increases.

c) So what is the difference between the groups of pensioners?

Primarily there is no difference. All pensioners would have paid the same rates of National Insurance Contributions during their working life so on retirement all would be entitled to the SP based of their National Insurance record. ( A difference is only introduced by the DWP by using the Regulation, as mentioned above, to freeze the pensions of that group of 565,000, (current number) that live in some overseas countries).

d) (As an example, a man retiring at 65 in 1986, (or a woman of 60) would have received a State Pension of £38.70. Today if they were living in the UK they would receive £110.15. However, if they had retired and lived in Canada they would still only be getting that same £38.70. If however they had moved to just across the border into the USA they would get the £110.15.) (The Queen and Prince Phillip?)

e) The dictionary definition of discrimination, A) Means an unfair system that treats one group of people worse than another. B) A failure to treat all persons or parties equally where no reasonable distinction can be found between those favoured and those not favoured. C) The prejudicial and/or distinguishing treatment of an individual based on their actual or perceived membership in a certain group or category, in a way that is worse than the way people are usually treated".

f) Frozen pensioners are therefore discriminated against on two levels. A) Having paid the same N.I. contributions as those pensioners living in the UK they are treated worse than the rest of the pensioners group. B) From the total number of pensioners living in countries other than the UK, frozen pensioners are discriminated against just because of the country they chose to live. There is no logical reason for this and it should not happen.

4) Why doesn’t the DWP uprate all pensions to stop the discrimination then?

a) For many many years the DWP in answer to questions from pensioners, the public, interested organisations and Members of both Houses in Parliament have said:

1) "We only uprate pensions where we are legally required to such as in the EU or where there is a Reciprocal Agreement, (RA), between the UK and a country".

NOTE There is an existing misconception that the DWP should clarify now to the public and Members of both houses in Parliamrnt and the press and media. They should make it quite clear that Reciprocal Agreement are not, and never have been, necessary for all frozen pensions to be uprated. They can be uprated by simple Domestic Legislation. There is no need or requirement for any other country to be involved what so ever. (It is only in the last year or so that the DWP, when challenged by a frozen pensioner through his MP, on this statement agreed that RAs are not necessary to uprate all pensions. [The DWP now uses the term "mutual agreement" in correspondence or comments instead of RA]).

The DWP statement fails to follow Parliamentary protocol of providing full information in answering questions in both Houses. It emphasises the intended misconception of how and why pensioners are frozen and surely adds fuel to the argument that discrimination should not be allowed to continue in the new Bill and should also be stopped for existing pensioners. (this cannot be covered in this Bill but as already pointed out it can be done by simple Domestic Legislation).

1) ) "It has always been this way so we wont change it . (**) The Minister used these words to the Committee. "It has been this way for decades and decades and decades". If that is a criteria then

SHOULD THE DEATH PENALTY STILL BE IN OPERATION? After all it had not changed "for decades and decades and decades". Of course it was changed, even after so long. Perhaps not a "nice" simile but that excuse of The Minister is floored by that and many other Laws and Regulations that over the years were reversed or changed. Times have changed, the style of living  has change, and travel facilities have changed. Freedom of choice has been opened up to the world so where you chose to live is not a reasonable excuse for discrimination.

3) "It will cost £650 million to uprate FPs and we cant afford it". The Minister was asked the cost of uprating and told the committee it was £655 million. the committee failed to question the Minister on the overall financial effects of frozen pensioners to enable them to "examine the expenditure, administration, and policy of the Department for Work and Pensions and its associated public bodies". The Minister again failed to give all relevant information as required by protocol. The relevant information on the

overall cost/reduced expenditure clearly shows that in the overall picture frozen pensioners are far less "expensive" than UK living pensioners. The Minister failed to acknowledge:

a) That in that overall UK budget frozen pensioners save an outlay of around £3 billion. Saved by not using the NHS and claiming other benefits. (Even after allowing for loss of VAT and other taxes). Many frozen pensioners still pay UK income tax on their SP or other UK income). The more overseas pensioners the more the reduction on the overall expenditure. There are hundreds of thousands of workers in the UK that come from overseas, (India, Pakistan, Bangladesh and most of the Caribbean. (two state though do have the UK pension uprated) ) that will be entitled to the UK BSP. Many will be put off from returning to their country of birth because of the frozen pension policy.

b) The Government Actuary Report that includes "--- The balance in the National Insurance Fund at 31 March 2014 is estimated at £27.0 billion". The NIF was set up for the collection and payment and exceptional circumstances relating to the BSP. Money from the NIF is loaned out, (at a low rate of interest), for housing and hospital building. To use £655 million of that £27 billion for the exceptional circumstance of uprating frozen pensions seems a logical step to take so that the existing discrimination does not continue any longer and does not continue in the future .

c) The fact of bringing forward the introduction of the STP to 2016 from 2017, will bring in an extra £5.5 billion pounds for the government. So in the not so distant future the added income will offset additional payments made to uprate all pensions. Both in the short and medium term uprating is not unaffordable.

d) That official figures reveal that more than £100 billion will be saved from increasing the State pension age to 67.

e) Clearly the failure of the Minister and the failure of the committee to refer to and question these 4 areas of finance relating to frozen pensioners and pensions, prevented a full and factual examination of the Bill, particularly towards frozen pensions. Prior to the consultation period commencing it is understood the DWP had stated that frozen pensions would not be an issue to be considered. The points raised in this section 4 certainly suggests that there was no intention of a full and in depth study on the question of frozen pensions.

f) .(**) 138. The Committee said " the frozen pension -- is clearly an anomaly". The Minister agreed and added that "it is an oddity, in some countries but not others" ,Instead of getting rid of this discriminatory anomaly, this oddity, he stated that it will continue in the new Bill!.

5) Equality or discrimination (see Para 3e for dictionary definition of discrimination)

a) Equality cannot be achieved if discrimination is allowed. If you have discrimination you cannot achieve equality.

b) The government states that "equality and fairness" is the principle of their policy.

c) The Commonwealth Charter that her Majesty the Queen quoted in her speech at the Commonwealth Day celebration on 11th.. March 2013. "The Commonwealth's values and commitment to equal rights --opposing all forms of discrimination:- - - and We are implacably opposed to all forms of discrimination, whether rooted in gender, race, colour, creed, political belief or other grounds."

d) The Pension Bill 2013 by virtue of clause 20 goes against both b) and c). So discrimination by clause 20 prevents equality.

e) both a) and b) have been used to the full in another Bill that has filled he newspapers over many weeks and politicians have quoted in support of that Bill.

f) ). Mr Cameron gave his full backing to that Bill saying "I believe in equality", Mr Clegg said "everyone deserves to live free from discrimination and prejudice," and "- - - a landmark for equality in Britain". Mr Miliband said, "- - - an important step forward in the fight for equality in Britain,"

g) We have the Prime Ministers full support for equality and therefore by definition fully against discrimination, but we have the Pension Minister supporting inequality and favouring discrimination. Both Bills are progressing through parliamentary procedure to become Acts. To conform with the ideals of the government policy and the Commonwealth Charter the Pension Bill must be brought in line with the other Bill and exclude clause 20 without question.

h) The select Committee surely should have compared these two Bills and recommend that clause 20 be removed on the grounds that it goes against both the Government Policy and the implacably opposed to all forms of discrimination, whether rooted in gender, race, colour, creed, political belief or other grounds of the Charter."

i) Frozen pensioners in some overseas countries are treated worse than, 1) all other pensioners either in the UK or other countries, and 2) other pensioners in other countries where the pension is not frozen. That is discrimination.

6) Communication

a) (**) "The key to the success of this reform is the way in which it is communicated to the public - -".

The DWP virtually ignores any opportunity to point out that every worker that will get the new pension will have that pension frozen if they then move to some, but not all, overseas countries. This is an important fact that all workers should be made aware of now. The DWP should in all press releases and media reports state:

"The Single-tier State Pension will increase annually for all pensioners, except pensioners living in some overseas countries (but not all). They will be worse off by never getting the revised (uprated) annual pension"

June 2013